72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 3339
B-Engrossed
House Bill 3072
Ordered by the Senate August 26
Including House Amendments dated April 21 and Senate Amendments
dated August 26
Sponsored by Representative BUTLER
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
{ - Authorizes state agencies, boards and commissions that
issue occupational or professional licenses to require licensees
to attest to tax compliance as condition of issuance or renewal
of license. Allows state agencies, boards and commissions to
suspend, revoke or refuse to issue or renew license if licensee
has been subject to 100 percent penalty relating to personal
income tax return. Allows Department of Revenue to disclose tax
information to agencies, boards and commissions that require tax
compliance. - }
{ + Establishes connection date for ties to federal law for
Oregon inheritance tax purposes. Grants rulemaking authority to
Department of Revenue to permit estates to claim elections
similar to elections made for federal estate tax purposes.
Establishes tax return filing thresholds. States unified credit
amount to be used in computing inheritance tax of decedents who
died during 2002. Allows department to extend return filing and
tax payment date for decedents who died during 2002 and 2003.
Takes effect on 91st day following adjournment sine die. + }
A BILL FOR AN ACT
Relating to tax compliance; creating new provisions; amending ORS
118.010, 118.160 and 118.230; and prescribing an effective
date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Sections 1a, 2, 3, 9 and 10 of this 2003 Act
are added to and made a part of ORS 118.005 to 118.840. + }
SECTION 1a. { + The Legislative Assembly finds that
significant recent changes have been made in federal estate tax
laws. The Legislative Assembly further finds that an unintended
consequence of these federal law changes has been to create
difficulties in the administration and enforcement of the Oregon
inheritance tax. The Legislative Assembly declares that sections
2 and 3 of this 2003 Act and the amendments to ORS 118.010,
118.160 and 118.230 by sections 6, 7 and 8 of this 2003 Act are
needed to ensure that the level of tax compliance with the Oregon
inheritance tax is at the level that Oregonians expect from a
fair and balanced tax system. + }
SECTION 2. { + Any term used in ORS 118.005 to 118.840 has the
same meaning as when used in a comparable context in the laws of
the federal Internal Revenue Code relating to federal estate
taxes, unless a different meaning is clearly required or the term
is specifically defined in ORS 118.005 to 118.840. Any reference
in ORS 118.005 to 118.840 to the Internal Revenue Code means the
federal Internal Revenue Code as amended and in effect on
December 31, 2000, except where the Legislative Assembly has
specifically provided otherwise. + }
SECTION 3. { + (1) Section 2 of this 2003 Act applies to
decedents dying on or after January 1, 1998, and to inheritance
taxes imposed on transfers of property occurring due to decedents
dying on or after January 1, 1998.
(2) Except where the Legislative Assembly has provided
otherwise, the effective and applicable dates, and the
exceptions, special rules and coordination with the Internal
Revenue Code, as amended, relative to those dates, contained in
the Taxpayer Relief Act of 1997 (P.L. 105-34) and the Internal
Revenue Service Restructuring and Reform Act of 1998 (P.L.
105-206), apply for purposes of ORS 118.005 to 118.840, to the
extent they can be made applicable, in the same manner as they
are applied under the Internal Revenue Code and related federal
law. + }
{ + NOTE: + } Sections 4 and 5 were deleted by amendment.
Subsequent sections were not renumbered.
SECTION 6. ORS 118.010 is amended to read:
118.010. (1) A tax is imposed upon a transfer of property and
any interest therein, within the jurisdiction of the state,
whether belonging to the inhabitants of this state or not, which
passes to or vests in any person or persons, or any body or
bodies politic or corporate, in trust or otherwise, or by reason
whereof any person or body politic or corporate shall become
beneficially entitled, in possession or expectation, to any
property or interest therein or income thereof.
(2) The tax imposed under this section shall equal the maximum
amount of the state death tax credit allowable against the
federal estate tax under section 2011 of the Internal Revenue
Code.
(3) In the case of a resident decedent owning property outside
of the jurisdiction of this state at the time of death, the tax
imposed under this section shall be the amount determined under
subsection (2) of this section multiplied by a ratio. The
numerator of the ratio shall be the sum of the appraised value of
the decedent's real property located in Oregon, tangible personal
property located in Oregon and intangible personal property
located both in and outside of Oregon. The denominator of the
ratio shall be the total appraised value of the decedent's gross
estate.
(4)(a) In the case of a nonresident decedent owning property
within the jurisdiction of this state at the time of death, the
tax imposed under this section shall be the amount determined
under subsection (2) of this section multiplied by a ratio. The
numerator of the ratio shall be the sum of the appraised value of
the decedent's real property located in Oregon, tangible personal
property located in Oregon and intangible personal property
located in Oregon. The denominator shall be the total appraised
value of the decedent's gross estate.
(b) Intangible personal property of a nonresident decedent
shall not be included in the numerator of the ratio used to
determine the tax under this subsection if a similar exemption is
made by the laws of the state or country of the decedent's
residence in favor of residents of this state.
(5) { + In the case of decedents dying before January 1,
2003, + } if federal estate tax credits other than the state
death tax credit result in no federal estate tax, no tax shall be
imposed under this section.
(6) Payment, in whole or in part, of inheritance and estate
taxes from funds of an estate or trust on any benefit subject to
tax under ORS 118.005 to 118.840 is not to be considered as a
further taxable benefit, when such payment is directed by
decedent's will or by a trust agreement.
{ + (7) If the federal taxable estate is determined by making
an election under section 2032 or 2056 of the Internal Revenue
Code or another provision of the Internal Revenue Code, or if a
federal estate tax return is not required under the Internal
Revenue Code, the Department of Revenue may adopt rules providing
for a separate election for state inheritance tax purposes. + }
SECTION 7. ORS 118.160 is amended to read:
118.160. (1) Except as provided in subsection (2) of this
section { - , - } { + :
(a) + } { - no inheritance tax return shall be - } { + An
inheritance tax return is not + } required with respect to the
estates of decedents dying on or after January 1, 1987, { + and
before January 1, 2003, + } unless a federal estate tax return is
required to be filed { + ; and
(b) An inheritance tax return is not required with respect to
the estates of decedents dying on or after:
(A) January 1, 2003, and before January 1, 2004, unless the
value of the gross estate is $700,000 or more;
(B) January 1, 2004, and before January 1, 2005, unless the
value of the gross estate is $850,000 or more;
(C) January 1, 2005, and before January 1, 2006, unless the
value of the gross estate is $950,000 or more; or
(D) January 1, 2006, unless the value of the gross estate is $1
million or more + }.
(2) In every estate, whether or not subject to administration
and whether or not a federal estate tax return is required to be
filed, the executor shall at such times and in such manner as
required by rules of the Department of Revenue, file with the
department a return in a form provided by the department setting
forth a list and description of all transfers of property, in
trust or otherwise, made by the decedent in the lifetime of the
decedent as a division or distribution of the estate of the
decedent made within the three-year period ending on the date of
death or intended to take effect at or after death and any
further data that the department requires to determine
inheritance tax under this chapter.
SECTION 8. ORS 118.230 is amended to read:
118.230. (1) Every tax imposed by ORS 118.005 to 118.840 is a
lien upon the property embraced in any inheritance, devise,
bequest, legacy or gift until paid, and the person to whom such
property is transferred, and the personal representatives and
trustees of every estate embracing such property are personally
liable for such tax until its payment, to the extent of the value
of such property.
(2) Taxes imposed under ORS 118.005 to 118.840 may be { +
assessed and + } collected by the Department of Revenue in the
same manner as income taxes are { + assessed and + } collected
under ORS chapter 314. The department may issue a warrant as
provided in ORS 314.430 { - , - } and record the warrant in the
County Clerk Lien Record maintained under ORS 205.130. A warrant
issued under this section has the same force and effect as a
warrant issued under ORS 314.430.
SECTION 9. { + (1) In the case of a decedent who dies on or
after January 1, 2002, and before January 1, 2004, the Department
of Revenue may extend the time for the filing of a return and for
the payment of any tax due under ORS 118.005 to 118.840 for a
reasonable period not to exceed four years from the date
otherwise fixed for the filing of a return and the payment of the
tax due.
(2) The department may prescribe rules and forms for granting
an extension under this section. + }
SECTION 10. { + Notwithstanding any other provision of ORS
118.005 to 118.840, in the case of decedents dying on or after
January 1, 2002, and before January 1, 2003:
(1) A return under ORS 118.005 to 118.840 is not required and
no tax is due under ORS 118.005 to 118.840 if the taxable estate
of the decedent is less than $1 million; and
(2) If a return is required under subsection (1) of this
section, the tax due under ORS 118.005 to 118.840 shall be
determined under the Internal Revenue Code as amended and in
effect on December 31, 2000, using a unified credit that does not
exceed $192,800. + }
SECTION 11. { + This 2003 Act takes effect on the 91st day
after the date on which the regular session of the Seventy-second
Legislative Assembly adjourns sine die. + }
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